Software Firm Adds Data Mining Consulting

While there's no shortage of businesses that want to pinpoint their most profitable customers and cut down on customer, many companies don't know exactly how to make data mining work.

To tap into what it thinks could be a lucrative consulting market, data mining software company Unica Technologies Inc., Lincoln, MA, has formed a new division to advise companies how to effectively integrate data mining into their larger marketing efforts.

"We'd like to work more in terms of walking customers through if they're a little bit unfamiliar with data mining. It's been plastered all over in terms of [being] a new technology and a way to help businesses grow, but we'd like to take some of the mystique out of that," said Rodger Burkley, vice president of business development and consulting at Unica.

The company formed the new division, which is staffed by technology specialists and data mining experts, late last month. The division will pinpoint businesses' data mining needs, teach companies how to integrate data mining technology into their marketing processes and IT infrastructures, carry out modeling, and, perhaps, eventually branch into campaign management, Burkley said.

He described the new division as an expansion of Unica's data mining solutions rather than a sign that the company is backing away from the software business. That business has served Unica well, yielding a 100 percent annual revenue growth rate over each of the last five years. The privately held company's sales are on track to exceed the $5 million mark this year, Burkley said.

Talk of creating the new division began in the summer in response to the number of clients who asked for help with mining their data, in some cases requesting that Unica do the modeling for them. Some of those customers already have hired Unica as consultants. Burkley declined to name the new division's clients, saying only that the unit is handling firms in telecommunications, retail and banking as well as at least one database marketing consultant.

Though Unica plans to market its consulting services outside of its current technology customer base, the company sees its software buyers as rich ground for cultivating clients.

"As we go up our existing customer base, we're going to run into situations where people are less familiar with data mining and they have less experience doing that kind of thing," said Kerry Reilly, Unica's new vice president of database marketing consulting.

Reilly, who oversees day-to-day operations in the division, joined the company in October from direct and database marketing firm TPC, where she was director of analytics. Ten people now work for the new unit.

Unica's premier technology package, called Model 1, identifies likely prospects, analyzes customer purchase patterns, predicts customers' monetary value, groups customers into clusters and lays out data in graphs and reports. The program is designed to be easy to use for both statisticians and marketers.

"We've developed our software products in such a way that they're not very consulting-intensive. They've got good ease of use," said Daryl Rinaldi, Unica's vice president of marketing, "but people still need some help in really formulating the business problem that has to be solved by the software."

In its consultation capacity, Unica will charge customers an hourly rate. Clients will be able to pick and choose from a set of services, so fees will vary.